Credit
fraud is one of the common phenomena in payment in international trade. To
reduce international trade payment due to credit problems lead to the
phenomenon of the other party suffered huge losses, will have to be based on
the current situation to further strengthen the management of l/c and strictly
enforced, with maximum extent, enterprise or individual will be broken out in international
trade, maintain the good environment of international trade. At the same time,
if the bank not to ask for documents on the surface of the authenticity, just
the surface make payment for the same data, then criminals can produce false
documents there swindle money from the bank. Due to the cost of using the l/c
fraud is less at the same time, the risk is small, the gains are bigger, so
using the l/c fraud behavior in the world we see growth, which is one of the
important factors that leads to the deterioration of the international trade
environment.

First,
the contract was cancelled due to the delay in issuing the l/c. For the sake of
their own interests, the exporter may postpone or refuse to open the l/c in the
aspect of issuing the l/c. Especially under the condition of larger when the
exchange rate changes, the exporter to avoid due to growth rates and led to a
decline in its earnings and then make a delay issuing or not issuing, thus
forcing Banks to cancel the contract. Because, according to law, on the first
day of the contract shipment date the issuing date is the best, but the seller
can only determine the month of shipment, most of them cannot be determined in
the specific which day for shipment. If the buyer does not prepare the l/c on the
first day of shipment, the bank will not be able to make payment and the seller
will not ship the goods. Second, according to the law, if a contract is to be
effective, it requires the buyer to issue a letter of credit in accordance with
the contract. Otherwise, the contract cannot be effective, which means the
interests of both parties cannot be guaranteed. When there is no special
regulation in the contract signed, generally implemented according to the
conventional habits is performed in accordance with the UPC500, means that the
buyer can't in the process of issuing additional accessories conditions for the
settlement of exchange, not only will be rejected by the seller and could also
face claims from each other.

In
principle, the two sides signed a contract with the terms of the l/c is
consistent, but there are various factors in the process of concrete operation,
leading to the importer fails to open a letter of credit according to the
rules, the contract to be executed, exports have suffered huge losses. On the
one hand, due to the fast changing market information, the parties are likely
to face the pressure of implementation, especially in the import side pressure
is bigger, so imports may do not strictly follow the contract to open the l/c
issuing or not, and so on and so forth. On the other hand, the importer
requires to change the contract terms in order to maximize his own interests
and minimize the risks in international trade. To achieve this purpose, the
importer will most likely require attachment in the l/c terms and conditions
for their own interests, to each other in the no conduct caused the
difficulties of execution, and even eventually suffered huge losses.

Driven
by interests, the importer will take advantage of the seriousness of the contract
and the strictness of the letter of credit to increase the additional clause,
so as to cause the other party difficulties in the performance of the contract.
For example, add vague terms, add clauses that are in conflict with the
contract, deliberately add errors, etc.

As
l/c is the key to contract execution and payment, it is easy to be used by the
importer to achieve its own purpose. The most common is to use the expired
letter of credit to defraud the goods of the other party. At this time, the exporter
can only rely on professionals or Banks to screen them.

Import
l/c through illegal means to get bank of blank, or illegally manufacturing
methods such as malicious collusion with the bank clerk false l/c to the
exporter, the exporter if negligence did not find, will cause a great loss.

If
did not delivery, increasingly, in terms of the contract, the date of shipment
samples approved by inspection and so on to make clear a regulation, especially
the provisions of the above date need to be further notice in order to carry
out, is most likely because the notice less or no notice and lead to the final
deal abortion, cause huge losses to the seller.

Whether
it is international trade or domestic trade, the credibility of both parties is
of vital importance. The credibility of both parties directly affects the
security of bilateral trade. For both sides, to protect their legal interests
in the process of trading and not easy to sign the contract and should be in
advance of each other's basic situation investigation, to get to know each
other whether have good reputation, especially if there is a default behavior.
Only when the other party has a good reputation can the contract be signed and
the specific transaction be carried out.

In
international trade due to differences in goods specifications or types of
transactions, the bank in the letter of credit? _ process differ, the trade
both parties based on protect the interests of both sides, and the purpose of
the largest extent, reduce the risk of trading shall apply raw bank according
to the actual circumstances of the actual transaction puts forward specific
requirements to all kinds of certificate, and requires both parties to strictly
carry out. At the same time, the buyer may also require the seller to provide
the certificate issued by the professional quality inspection authorities on
the interim delivery of documents to protect its own interests.

For
the buyer, the seller's falsification of the documents is a common occurrence,
and if the inspection fails, the loss will be large. On the contrary, for the
seller, the buyer may also cheat on the documents or certificates, and the loss
is also huge. Therefore, for both parties, the following two points should be
achieved in the transaction process: first, strictly follow the contract and
formulate various documents; Secondly, strict inspection of all kinds of
information in documents is carried out according to the content of the
contract and the actual transaction situation, so as to avoid the discovery of
false documents. Finally, if there is any fraud in the documents, the
transaction should be stopped in time and the other party should be held
accountable in accordance with the law.